The Central Bank of Nigeria (CBN) has selected Barbados-based fintech company Bitt Inc. as the technical partner for its Central Bank Digital Currency, named eNaira, which is expected to be launched later in 2021.
Bitt was selected from among highly competitive bidders based on the company’s technological competence, efficiency, platform security, interoperability, and implementation experience.
In selecting Bitt, CBN will rely on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean Countries. Bitt was key to the development and successful launch of the CBDC pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021.
CBN Governor Godwin Emefiele said the launch of the CBDC will enable increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows, easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection.
CBDCs facilitate lower cost transactions, compared to existing mechanisms such as wire transfers, cheques, inter-bank transfers, bill payment, etc. lowering the overall cost of doing business.
The Nigerian CBDC pilot, known as Project Giant, was a result extensive research and explorations after the bank decided to digitize the Naira in 2017. CBN’s decision follows more than 85 percent of Central Banks that are now considering adopting digital currencies in their countries.
The introduction of CBDCs are expected to enable the Central Banks to save an estimated 90 percent on the costs associated with minting and issuing physical notes and coins, secure transportation, storage and distribution, and the collection and replacement of damaged notes and coins.
The cryptographically produced digital currencies are also traceable as it has its own digital serial number and watermark that the Central Banks can track and audit. Each transaction is recorded and can also be viewed and tracked in real-time, facilitating better compliance with Anti-Money Laundering (AML) and Combating of Financing of Terrorism (CFT) frameworks.
The system also proves authenticity constantly through digital verification, and every transaction taking place in CBDCs is instantaneously verified on blockchains distributed ledger for authenticity and will not be processed unless it is issued by the Central Bank.
Bitt’s Central Bank Management Panel software is designed to provide real-time detailed information and reports on transaction activity including number of transactions, speed of transactions, and velocity of circulation of money. This gives the Central Banks the ability to accurately monitor the effect of monetary policy actions and make adjustments accordingly.
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